WASHINGTON – The indictment of Sen. Hillary Clinton’s former Senate campaign finance chairman, David Rosen, on campaign finance charges was made possible by the cooperation of Judicial Watch client Peter Paul, the public interest watchdog group said today.

Paul, a former Hollywood Internet entrepreneur and partner of “Spiderman” creator Stan Lee, spent nearly $2 million to produce the August 2000 Hollywood tribute to honor President Clinton and to help raise funds for Hillary Clinton’s 2000 U.S. Senate campaign – the event at the center of the indictment.

He was repeatedly assured that his expenses would be reported to the Federal Election Commission, according to Judicial Watch.

The Justice Department indictment charges Rosen with causing false campaign finance reports to be filed with the FEC. Rosen reported contributions of only $400,000 from the Hollywood gala. He also is alleged to have filed a fraudulent invoice for the cost of the concert portion of the gala, reporting $200,000 when the actual cost was more than $600,000. Rosen faces up to five years in prison and up to $250,000 in fines on each of four counts of making a false statement.

Judicial Watch brought a lawsuit in 2001 on behalf of Paul against Bill and Hillary Clinton, Rosen and other Clinton representatives after Bill Clinton reneged on a $17 million deal to work for Paul’s Internet companies after he left the White House and because Paul’s expenses were not reported by Hillary Clinton to the FEC, as was required by law.

Paul has documentary evidence of his close relationship with the Clintons, including checks, thank-you notes from the Clintons and candid video and photographs, according to Judicial Watch. Hillary Clinton was intimately involved in setting up the Hollywood gala and knew of the FEC misreporting, the group says.

“Judicial Watch welcomes the indictment of David Rosen on campaign finance charges, an indictment that was made possible by our client Peter Paul’s cooperation with the U.S. Justice Department,” said Judicial Watch President Tom Fitton. “We hope the Justice Department pursues this case all the way to Hillary Clinton.”

Rosen is the second figure involved in organizing the soiree for Clinton to become entangled in legal problems as a result.

Aaron Tonken is currently in prison for his role in organizing the event – a tribute to then-President Bill Clinton and starring Cher, Patti LaBelle, Sugar Ray, Toni Braxton, Melissa Etheridge, Michael Bolton, Paul Anka and Diana Ross.

Tonken has authored a tell-all book,
HREF="http://superstore.wnd.com/store/item.asp?ITEM_ID=1632">“King of Cons: Exposing the Dirty, Rotten Secrets of the Washington Elite and Hollywood Celebrities,” on his role in the fraud.

The FBI previously said in court papers that it had evidence the former first lady’s campaign deliberately understated its fund-raising costs so it would have more money to spend on her campaign.

While the event allegedly cost more than $1.2 million, the indictment said, Rosen reported contributions of about $400,000, knowing the figure to be false.

The indictment charged that he provided some documents to an FEC compliance officer but withheld the true costs of the event and provided false documents to substantiate the lower figure.

In one instance, Rosen obtained and delivered a fraudulent invoice stating the cost of a concert associated with the gala was $200,000 when he knew that figure was false, according to the indictment. The actual cost of the concert was more than $600,000.

Each of the four counts of making a false statement carries a maximum penalty of up to five years in prison and up to $250,000 in fines upon conviction.

Mrs. Clinton’s lawyer on campaign finance matters, David Kendall, told the Associated Press: “The Senate Campaign Committee has fully cooperated with the investigation. Mr. Rosen worked hard for the campaign, and we trust that when all the facts are in, he will be cleared.”

The businessman who hosted the event, Peter Paul, has told federal authorities that it cost more than $1 million and that he had been surprised when he saw that most of the contributions were not reported.

The money from the fund-raiser went to Mrs. Clinton’s successful campaign for a Senate seat from New York, the Democrats’ national Senate campaign organization and a state Democratic Party committee.

During former President Clinton’s administration, a Justice Department campaign finance task force charged more than two dozen individuals and two corporations with fund-raising abuses from the 1996 election cycle. Many of the charges involved Democratic fund raising.

In addition to his Clinton effort, Rosen has raised money for several other high-profile Democratic candidates, including former presidential hopeful Wesley Clark. Most recently, he was named to the fund-raising team of Donnie Fowler, a candidate for the Democratic National Committee chairmanship.

Tonken, 34 at the time of the 2000 fund-raiser, basked in his role in organizing the fund-raiser, never imaging he’d be facing down government investigators within a couple of years.

Writes Tonken in describing the departure of the Clintons the night of the gala: “Just before they got into the limo, I handed the president gifts from me, Stan Lee and Peter Paul: for him, a custom humidor and a handmade gold watch worth tens of thousands; for Hillary, a necklace that cost eight grand. The first lady disliked it and later sent it back.

“Before my car arrived, I had my last fond glimpses of this gathering of the rich and famous. I watched them drive off into the night. I may have been the ultimate outsider growing up, but not any more. Now I was in, and they were my people.

“But not for long. In less than three years I’d be busted. Instead of chronicling my stunning successes, Variety’s Army Archerd would be writing about my criminal misdeeds; I’d be talking not to presidents and movie stars, but to the FBI and other federal agencies, handing over more than two dozen boxes of letters, e-mails, receipts and invoices, cooperating as the government pursued a multifaceted investigation into the corruption that lay hidden behind all the glitter.”

Tonken pleaded guilty last year to one count of mail fraud and one count of wire fraud in hopes of ultimately getting a lesser prison sentence. Instead, he was sentenced to 63 months in prison and ordered to pay $3.79 million to donors and event underwriters whom he bilked.

He clearly implicated Rosen.

“David Rosen, Hillary Clinton’s director of finance, worked out of our offices and knew about every dime that was being spent,” he writes. “More than that, he participated in the spending.”

In his account of his dealings with Hillary, Tonken mentions how grateful she had been to him for all his help with her campaign. But how much did she know about the financial skullduggery?

“One thing about Hillary, she was very attentive to the little details,” he writes. “I believe she is genuinely considerate in that way. The very next day [after the Hollywood fund-raiser], she sent me a thank-you note, partially handwritten, in which she said: ‘Your ongoing support of my Senate candidacy is especially important to me, and I am grateful for your continued friendship.’

“Take a good, long look at the first half of that last sentence. I did, and it made me wonder: Did she really know what was going on? I think David Rosen knew; I think [longtime aide] Kelly Craighead knew; I think [fund-raiser] Jim Levin knew. But Hillary? It was very possible that they hid it from her. In a way, that was their job. Protect the candidate.

“That was all about to change.”

Tonken later writes he explained what he was doing and how to the Senate candidate while the two were alone briefly in a van during a day of campaigning in L.A.:

“I’d spent odd moments alone with [Hillary] before, primarily in the evening at the White House. But this was my real shot to talk to her with no one else around, and what I wanted was to let her know how much I admired her, how much I was behind her, and most important, what I had already done for her. It was, quite by accident, the moment of truth. …

“I told her about virtually every penny I’d spent on her behalf. I let her know what I was doing and had done for each event of hers. I spoke about the money and what a pleasure and honor it was to spend it on her candidacy for the U.S. Senate.

“Once and for all, I wanted it clear in her mind who was the person really doing things for her. There was so much jockeying for position among those around her: Kelly, David, Jim Levin, and so on. People taking credit for stuff. I thought I might have been short-changed, and I wanted to correct that.

“I believed that once she knew the facts, she would see how valuable I was to her and welcome me into her inner circle. The whole thing was intended to be solely for my benefit. I never wanted to hurt her. I could tell she wasn’t entirely comfortable with this conversation, and yet I couldn’t stop. It wasn’t until much later that I fully realized what I had done. Whatever protection her staff had built around her, however much in the dark they had kept her, that was over.

“Now she knew.”

Further implicating Rosen, Tonken writes of how he would run his schemes by the finance director and would routinely get the go-ahead.

Writes Tonken: “Since I had only a passing acquaintance with campaign-finance law. If there was any question in my mind, I’d call David. The problem was, whenever I asked for advice he would invariably laugh off my concerns and say, ‘Don’t worry. Just raise as much as possible. Just keep at it.’

“Here’s an example: I came up with what I thought was a great idea to make it look as though support were coming from a lot of little donors, instead of one big one. I proposed that [Democratic donor] Cynthia [Gershman] would write a check for 40 grand, which she was willing to do, and I would run it through one of my accounts and emerge with cash and started giving it out in one-thousand- or two-thousand-dollar chunks to 20 or 30 people. They would then turn around and write personal checks of their own for the same amount, and that would be ‘their’ contribution. Sounded good to me, but when I presented it to David he laughed for about three minutes straight. When we got down to it, though, he told me to go ahead.

“I should have been suspicious when he added, ‘Just don’t tell anyone.’ Later, he would pull me aside at Spago and re-emphasize the point: I was to keep that little trick of mine quiet, ‘very quiet.’”

Tonken also writes of Rosen’s concern about expenses, telling the author to “get rid” of receipts related to fund-raiser expenditures.

“What we want is the appearance that expenses were minimal,” Tonken says Rosen told him.

A 2002 FBI affidavit backs up Tonken’s account:

“The [2000 Hillary event's] costs exceeded $1 million, but the required forms filed by New York Senate 2000 … months after the event incorrectly disclosed that the cost of the event was only $523,000,” the affidavit reads. “It appears that the true cost of the event was deliberately understated in order to increase the amount of funds available to New York Senate 2000 for federal campaign activities.”

Tonken’s book tells how he continued to do his job after federal agents contacted him about cooperating with their probe.

“Month after month this investigation went on,” he writes.” My life began to seem surreal. Here I was, doing charity events where there was fraud involved; continuing to expand my political contacts, fielding telephone calls from President Clinton, the first lady and Gerald Ford; and at the same time being enmeshed in an FBI probe.”

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